Paying UK national insurance contributions directly from Germany

118 posts in this topic

I have been living in Germany and paying voluntary UK NI contributions for years.

To do this I transfer a chunk of money back to my old UK online account (registered at my parents address) once in a while from which the contributions are then withdrawn every month by direct debit. Currently this is working fine.

 

However I see that my UK credit card is now asking to confirm payments on their app, which I am blocked from downloading to my smartphone in Germany. If my UK bank account goes the same way it could make everything really awkward. If I am obstructed from paying in in the future, then I guess I might as well consider stopping paying in now. :mellow:

 

Is there some way to pay directly from Germany or the EU? Does anyone else have any ideas about this?

In section 6 of form NI38 I note there is an option to pay anually rather than monthly, so if I had to make an international transfer with fees, I guess it would be better to switch to that.

 

Sorry if this has already been discussed on another thread. I had a search for it.

0

Share this post


Link to post
Share on other sites
13 minutes ago, GreenDave said:

Is there some way to pay directly from Germany or the EU? Does anyone else have any ideas about this?

 

Call HMRC and ask them.  I paid annually by cheque drawn on my UK bank (HMRC told me exactly what to write on the back).

0

Share this post


Link to post
Share on other sites

They do not like getting cheques at the moment as it is taking a lot longer to process them with so many working from home. Have you thought of using something like Transferwise to send the money? All you need for the reference is your national insurance number followed by IC then your surname and first initial  all with no gaps!  I have a letter with details of how to pay from abroad that I will do a photo of later when I find where I put it!

0

Share this post


Link to post
Share on other sites

Easier to find than I thought! Instructions from the back of the letter are on the attached file. So if you want to pay annually this is the way. 

HMRC.jpg

2

Share this post


Link to post
Share on other sites

Do you know how much it is to pay Class 3 for tax year 2020-2021 ?

0

Share this post


Link to post
Share on other sites

I was about to say broadly the same as SusieT.  At the end of the day, I don't think HMRC care who physically pays the amount, only that is it paid with the right reference number to the account number they provide.  As long as that account has an IBAN number, you should be able to pay from your German account - taking the exchange rate hit there rather than wherever else you change your currency (I know that might be more expensive...).

 

The other thing to note is that there is no requirement to pay monthly, or even annually for that matter, well for Class 3 payments anyway - Class 2 could be different, so you should check with HMRC.  In general (again, for Class3) you can pay up to 6 years in arrears, i.e. 6 years after the end of the year in question.  However, if you pay more than 2 years after the relevant year you pay at the rate for the year in which payment is made, not the year to which the payment refers.  However, given that Class 3 payments are only increasing by 0.5% from April, you may choose to take the hit. For instance, if you wanted to pay Class 3 for 2017/18 in, say May this year, you would pay £800 rather than £741, Had you paid by the end of March 2020 it would have been £741 and by the end of March 2021, £795.

 

My thinking therefore is have a chat with HMRC (might also get pointed at DWP as HMRC generally asks you to confirm you have checked with DWP that making voluntary payments will advantage you) and say you would prefer to change from making payments monthly to making them annually and for current cash flow reasons (Covid, furlough etc) you wish to stop altogether and make lump sums relating to the current year and future years within the 2 and 6-year time limit windows.  You would have to make careful diary notes to make sure you don't miss the deadlines but could make payment for 2 or more years at a time, saving on agro and transaction costs.  You could also chose a time when the £/€ rate is favourable for you (within reason).

 

 

1

Share this post


Link to post
Share on other sites
1 hour ago, optimista said:

Do you know how much it is to pay Class 3 for tax year 2020-2021 ?

Sad I as am, I am keeping a record for personal use as we are having to pay Cl.3.  It is of course all on GOV.UK if you want or need to check that I have picked up the right numbers...

 

Year

 

Cl. 3 Rate

 

2017/18

 

£741.00

 

2018/19

 

£761.80

 

2019/20

 

£780.00

 

2020/21

 

£795.60

 

2021/22

 

£800.80

 

  

1

Share this post


Link to post
Share on other sites
Just now, optimista said:

Thank you so much!

 

I should just add that 2021/22 is my projection of the 0.5% increase, so it could be a little or a lot different once published on GOV.UK...

1

Share this post


Link to post
Share on other sites
6 minutes ago, GaryC said:

 

I should just add that 2021/22 is my projection of the 0.5% increase, so it could be a little or a lot different once published on GOV.UK...

I think this is where it will be published in due course   Voluntary National Insurance: Rates - GOV.UK (www.gov.uk)

 

The text at the bottom of that page shows there is a difference between time limits for Class 2 and Class 3

When you pay different rates

If you’re paying Class 2 contributions for the previous tax year or Class 3 contributions for the previous 2 tax years, you pay the original rate for those tax years.

 

1

Share this post


Link to post
Share on other sites

Not wishing to ask your actual age but if you have years that pre-date 2016/17 when the new state pension was introduced, do you know how many more years you need to pay NIC to get the max possible pension under the new rules? 

 

At 5 April 2016 a calculation was done to move you from the old to the new rules.  Basically it was the higher of what you would have got under the old rules at that time and what you would have got under the new rules.  After that you add 1/35 x max new state pension for each year you add/pay voluntarily. 

 

So, if you had no pre-2016 years you would need 35 years to get the max new state pension but if your stating amount at April 2016 was calculated as, say, the max under the old rules (£119.30 at that time but risen to £134.25 for 2020/21) you would need to pay "only" 8.19, i.e. 9 years to get the most possible when you claim your pension.  If you were 15 years from state pension age at 2016 and were only considering voluntary payments as not working in the UK, my understanding is that there would be no point paying more than those 9 years.  If you paid all 15 you would gain no benefit.  I think this is one reason why HMRC requires you to speak to DWP before they allow you to pay voluntary NIC.

 

I am sure you have done this but if not, ask HMRC for a state pension forecast and a copy of your NI record (this will also show years that are only part-filled.  Filling such years, if beneficial in terms of your pension, can be cheaper than filling different currently empty years).  Anyway, your forecast will show you what you could get in today's terms based on your current NIC record and what you could get if you make X more years' NIC payments (the max you can get, minus what you could get now, divided by £5 for 2020/21, equals number of years that need paying voluntarily).  Despite this your NIC record and, I think the pension forecast, may suggest that you still need to pay NIC for those 15 years.  This is because you pay mandatory NIC if you are working until state pension age even if you have already amassed enough years for a max state pension and the paperwork is not "clever enough" to deal with those looking at voluntary contributions...  

 

Below is a copy of my forecast in case it helps de-mystify the process.  The max possible for me is £174.32 - about 90p per week under the max.  I have not paid NIC since I retired in 2019/20, so have a part year for 2019/20, hence the third row in the graphic.  If I pay no further NIC I would get £149.30 per week; pay 2020/21, 22, 23 and 24, then I get £169.32. Pay also the missing part of 2019/20 then I get the max possible of £174.32. 

 

I then have to live about 3 1/4 years after claiming my pension to recoup the investment in voluntary NIC.  Not to be too morbid about it, but delaying paying Class 3, and possibly even leaving that decision until early 2025 (shortly before I claim my pension) would ensure that if I were, by that time to be terminally ill (thankfully no signs of that at the moment!!!!), I could save the money as there is no widow's pension in the UK.  Don't you just love getting old!

 

Hope this helps.

  

Capture.JPG

0

Share this post


Link to post
Share on other sites
4 hours ago, GaryC said:

Sad I as am, I am keeping a record for personal use as we are having to pay Cl.3.  It is of course all on GOV.UK if you want or need to check that I have picked up the right numbers...

 

Year

 

Cl. 3 Rate

 

2017/18

 

£741.00

 

2018/19

 

£761.80

 

2019/20

 

£780.00

 

2020/21

 

£795.60

 

2021/22

 

£800.80

 

  

Your numbers are the same as mine!  My current estimate is 161.67  I have just paid 2018/19 and mid 2020 did a fill up of a prior year. All being well I may be able to pay 1 more year at the end of this month, then I can look at what will be a clearer picture after they do the tax year end update to see how best to make up whatever is left as soon as possible - then it is done and I can forget about it!

0

Share this post


Link to post
Share on other sites
6 minutes ago, SusieT said:

Your numbers are the same as mine!  My current estimate is 161.67  I have just paid 2018/19 and mid 2020 did a fill up of a prior year. All being well I may be able to pay 1 more year at the end of this month, then I can look at what will be a clearer picture after they do the tax year end update to see how best to make up whatever is left as soon as possible - then it is done and I can forget about it!

The updates can take quite a while to hit the system - seldom before about July and last year was well into the Autumn from memory.  The same goes for when the payment of voluntary contributions show up on your record after payment.  That too can take several months but they do show up in the end, so no need to panic after a few weeks...

0

Share this post


Link to post
Share on other sites
1 minute ago, GaryC said:

The updates can take quite a while to hit the system - seldom before about July and last year was well into the Autumn from memory.  The same goes for when the payment of voluntary contributions show up on your record after payment.  That too can take several months but they do show up in the end, so no need to panic after a few weeks...

Oh I can wait, but I want to do what I can this side of the year end so that I can have a clearer view. I really want to get all the payments finished by this time next year, have a full pension waiting for me when the 2022 forecast eventually updates, and  I can delete my spreadsheet and forget it until I retire!

0

Share this post


Link to post
Share on other sites
1 hour ago, SusieT said:

Your numbers are the same as mine!  My current estimate is 161.67  I have just paid 2018/19 and mid 2020 did a fill up of a prior year. All being well I may be able to pay 1 more year at the end of this month, then I can look at what will be a clearer picture after they do the tax year end update to see how best to make up whatever is left as soon as possible - then it is done and I can forget about it!

SusieT - if you have years before 2018/19 that still need filling, especially if they come under the special rules that allow you more than the normal 6 years, I would fill them first to ensure you don't lose out.  If those years are pre-2016, then you may be able to go back as far as 2006 but should speak with DWP to ensure it is worth filling them...

Voluntary National Insurance: How and when to pay - GOV.UK (www.gov.uk)

"You’re a man born after 5 April 1951 or a woman born after 5 April 1953

You have until 5 April 2023 to pay voluntary contributions to make up for gaps between April 2006 and April 2016."

 

Edited rather than adding another entry

I have been wandering around the search engines looking for something else on pensions and came across this helpful PDF from Royal London.  I am not sure it is (any longer) correct in terms of providing your starting amount by going to your pension forecast, well, not in an easy to glean format as you have to deduct amounts from that forecast to back-track to 2016, and it is based on state pension amounts in 2018/19, so you would again need to adjust the figures to 2020/21 of £175.20 max per week (new state pension), each added year being worth 1/35 of that (£5) and the old state pension now sitting at £134.25 pw but it is doable if you want to understand your own position...

 

Anyway, it's here  topping-up-your-state-pension-guide.pdf (royallondon.com) if you are interested in how it all works...

0

Share this post


Link to post
Share on other sites
44 minutes ago, GaryC said:

SusieT - if you have years before 2018/19 that still need filling, especially if they come under the special rules that allow you more than the normal 6 years, I would fill them first to ensure you don't lose out.  If those years are pre-2016, then you may be able to go back as far as 2006 but should speak with DWP to ensure it is worth filling them...

Voluntary National Insurance: How and when to pay - GOV.UK (www.gov.uk)

"You’re a man born after 5 April 1951 or a woman born after 5 April 1953

You have until 5 April 2023 to pay voluntary contributions to make up for gaps between April 2006 and April 2016."

 

Edited rather than adding another entry

I have been wandering around the search engines looking for something else on pensions and came across this helpful PDF from Royal London.  I am not sure it is (any longer) correct in terms of providing your starting amount by going to your pension forecast, well, not in an easy to glean format as you have to deduct amounts from that forecast to back-track to 2016, and it is based on state pension amounts in 2018/19, so you would again need to adjust the figures to 2020/21 of £175.20 max per week (new state pension), each added year being worth 1/35 of that (£5) and the old state pension now sitting at £134.25 pw but it is doable if you want to understand your own position...

 

Anyway, it's here  topping-up-your-state-pension-guide.pdf (royallondon.com) if you are interested in how it all works...

Thats how I have done my spreadsheet, I have the years to date that actually count as I was contracted out for a good while - looking back I would have been better off staying in, but everyone was being advised to do it at the time. years I have topped up or paid in full, and years needed to get me to the magic £175.20. I will fill 2019/20 first as it is still at the old rate, then I have a part year that may be enough to make up the difference, if not there are plenty of empty years from 2009 onwards that are showing as available to top up. Its the last little bit that I need to make sure of, so I will not need to go back too far with them. 

0

Share this post


Link to post
Share on other sites

Part years don't count until they are topped up to become full years, so the question would be, do you need only the year that is partly paid, or that and other years.  If you need only the topable-upable year that is the cheapest way to go, even if the yearly rate is higher.

 

So, if you have paid, say £300 for 2017/18, subject to all of that counting as there are weekly and monthly maxima, you would need only to pay £495 (assuming you would now have to pay at the 2020/21 rate until the end of March 2021!) to make that year count and potentially take you over the line.  That would compare to paying 2019/20 in full at £780 to achieve the same outcome.

 

If you need both years then it matters not when you pay, especially as the rate is increasing by only £5 per year (0.5%) from April.

 

Personally, I would be having a long chat with DWP to ensure I get it right

0

Share this post


Link to post
Share on other sites
57 minutes ago, GaryC said:

Part years don't count until they are topped up to become full years, so the question would be, do you need only the year that is partly paid, or that and other years.  If you need only the topable-upable year that is the cheapest way to go, even if the yearly rate is higher.

 

So, if you have paid, say £300 for 2017/18, subject to all of that counting as there are weekly and monthly maxima, you would need only to pay £495 (assuming you would now have to pay at the 2020/21 rate until the end of March 2021!) to make that year count and potentially take you over the line.  That would compare to paying 2019/20 in full at £780 to achieve the same outcome.

 

If you need both years then it matters not when you pay, especially as the rate is increasing by only £5 per year (0.5%) from April.

 

Personally, I would be having a long chat with DWP to ensure I get it right

I have just checked my spreadsheet, I need the part year, 2019/20 and possibly a another 1 more. I did talk to DWP early last year and they confirmed what I already knew, I am going to call again when this year updates and I have a clear view of whats needed, I have done the easy years that I knew would be ok to pay (and that I could afford), and then any others I can get confirmed when I do a final talk to make sure its all there and correct - and hopefully that £5 stays in my pocket :lol:

Edited to add, thats jump started my memory, since the part year is cheaper I think it will be possible to pay that at the the current rate this month, then I can pay 2019/20 at the original rate later this year - that will be nearly £10 to me :D 

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now